"There is only one power that determines the course of history . . . the power of ideas." — Ayn Rand

Monday, July 17, 2017

End NJ's Public Pension Corruption Once and For All

New Jersey’s public pension system is in deep, deep trouble. The problem is classic: It’s woefully underfunded, meaning the promised benefits to public retirees far exceed what the balance of the funds can provide. And it is the taxpayers who are ultimately on the hook. The source of the problem is what I would call a blatantly corrupt connection between public employee unions and vote-seeking legislators, who can promise benefits while sticking future taxpayers with the bill.

This has been going on for a long, long time. But the chickens are now flocking home, and will begin roosting in the very near future unless drastic action is taken to fix the problem. Of course, expecting politicians to fix problems that politicians themselves have caused is like Linus camping out all night in the pumpkin patch waiting for the rise of the Great Pumpkin.

Some politicians, in cahoots with their public union allies, have thrown their support behind a ridiculous quick-fix; an amendment to the state constitution requiring the state to fully fund the pension. It’s been some three decades since any governor managed to find the money to do that. So these simpletons have concocted a solution less plausible than the Great Pumpkin: Just pass a law, and the $billions upon $billions of dollars that no governor in 30 years has been able to find will suddenly materialize!

Paul Mulshine shined a light on this corruption in an article titled Steve Sweeney wins one as the unions try to put the arm on the taxpayers. Sweeney is the state senate president, and one of the most powerful Democrats in the state. The thing is, Sweeney leads a private sector trade union, the ironworkers, and so is very sensitive to the stark difference between the public employee unions, which have these “sweetheart” deals with legislators to jack up pension benefits, and the private sector unions, which fund and run their own funds and thus are responsible for balancing the intake and benefits of the funds. As Mulshine observes, Sweeney understands that the public unions’ benefits now far exceed anything the private sector can get, and that the private sector is on the hook for the public sector’s over-generous benefits—a double whammy for the private sector, including his ironworkers union. His members know it, too.

Incredibly, the public union officials, oblivious to the differences, still believe in unity among all unions, public and private. As Mulshine observes,

"Stay united because people will try to divide you," [Assemblyman Daniel] Benson, [an NJEA puppet] said [at a public union rally demanding that the legislature “post the bill now” to put the Amendment on the ballot], "Whether you're teachers, public employees, private laborers, public trades, building trades, we need to stay together as laborers as citizens of this state."

Whoever was trying to divide the public-sector from the private-sector unions was doing a good job of it.

Highlighting the corrupt relationship between the public unions and the politicians, Mulshine cracks, “Forget arm's length. There's not a finger's length between many legislators and unions such as the New Jersey Education Association.”

I would call this corrupt to its core. So why not end it? There’s already a working model to emulate—the private trade unions. The unions control and operate their own pensions and benefits, both deciding what level of benefits to provide their members and how much of their pay packages—negotiated periodically in “arms-length” negotiations with employers—to allocate toward the funds (which are pre-tax).

I’m a retired plumber from a local union which I joined in 1967. That’s the way it’s always been. It’s up to we the membership to keep benefits and contributions in line. We pay the price for our mistakes, if any. We reap the rewards of good management. I know of no local trade union that doesn’t have a self-managed system. You’d be amazed how responsible people can be when they are actually responsible for paying their own way.

We have two problems: the unfunded current liability, and the corrupt “finger's length” system that caused it. Any “fix” that doesn’t end the current state-managed/taxpayer funded system is worthless, in my view. I’m surprised Sweeney isn’t pushing this long-term solution rather than trap the taxpayers into a constitutional mandate, given that he’s an official of a private trade union.

About Me

Greetings and welcome to my blog. My name is Michael A. (Mike) LaFerrara. I sometimes use the pen or "screen" name "Mike Zemack" or "Zemack" in online activism, such as posted comments on articles. “Zemack” stands for the first letters of the names of my six grandchildren. I was born in 1949 in New Jersey, U.S.A., where I retired from a career in the plumbing, building controls, and construction industries, and still reside with my wife of 45 years. The purpose of my blog is the discussion of a wide range of topics relating to human events from the perspective of Objectivism, the philosophy of reason, rational self-interest, and Americanism originated by Ayn Rand.

As Rand observed: “The professional intellectual is the field agent of the army whose commander-in-chief is the philosopher.” I am certainly not the philosopher. But neither am I a field agent, or general. I am a foot soldier in that Objectivist army that fights for an individualist society in which every person can live in dignified sovereignty, by his own reasoned judgment, for his own sake, in that state of peaceful coexistence with his fellow man that only capitalist political and economic freedom can provide. While I am a fully committed Objectivist, my opinions are based on my own understanding of Objectivism, and should not be taken as definitive “Objectivist positions.” For the full story of my journey toward Objectivism, see my Introduction.

One final introductory note: I strongly recommend Philosophy, Who Needs it, which highlights the inescapable importance of philosophy in every individual's life. I can be reached at mal.atlas@comcast.net. Thanks, Mike LaFerrara.

Recommended Essays/Videos

Quotes I Like

Let me give you a tip on a clue to men’s characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it. Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter.—Francisco d'Anconia

I love getting older...I get to grow up and learn things. Madalyn, 5 years old, Montesorri student, and my grand-daughter

The best thing one can do for the poor is to not become one of them. Author Unknown

Nature, to be commanded, must be obeyed. Francis Bacon

Freedom is never more than one generation away from extinction. Ronald Reagan

Thinking is hard work. If it weren't, more people would do it. Henry Ford

Intellectual freedom cannot exist without political freedom; political freedom cannot exist without economic freedom; a free mind and a free market are corollaries. Ayn Rand